Will govt raise the cap on subsidised LPG cylinders?

November 23, 2012 16:15 IST

The government is looking into demands for raising the cap on supply of subsidised cooking gas (LPG) cylinders per households, Oil Minister M Veerappa Moily said.

The government had on September 13 decided to restrict the supply of subsidised LPG to 6 cylinders of 14.2-kg each to every household in a year. Any requirement beyond this had to be purchased at market rates which are more than double the subsidised price of Rs 410.50 per bottle in Delhi.

"Representations have been received to revise the annual cap, which are being looked into," he said in a written reply to a question in the Lok Sabha.

Moily said any requirement beyond the six subsidized cylinders are currently being priced at Rs 895.50 per 14.2-kg bottle in Delhi.

Following the decision, the oil companies are weeding out consumers having multiple connections. They have generated a list of suspected customers who have multiple connections, he said adding customers have been asked to submit the Know-Your Customer (KYC) form to the LPG distributors to prove their genuineness.

So far 10.84 lakh connections have been blocked and of these connections 2.41 lakh have been surrendered, he said. "Oil marketing companies have blocked 55,41,887 LPG connections during ongoing KYC drive, in an effort to stop diversion of subsidised domestic LPG."

Moily said for the purpose of issue of subsidised LPG, a family is considered to be consisting of husband, wife, unmarried children and dependent parents living together in a dwelling unit having common kitchen.

Multiple LPG connections in different names at the same address and same-name-same-address have been allowed by converting them into market priced supplies, he added.

The public sector OMCs incurred a revenue loss of Rs 138,541 crore on sale of diesel, PDS kerosene and domestic LPG at government controlled rates in 2011-12.

"The OMCs need to be compensated in order not only to maintain their financial health but also to allow them to generate resources for capital expenditure, modernisation and acquisition of assets for future growth," Moily said.